In the October 13, 2017 “Too Embarrassed To Ask” show from VOX Media/ReCode, Kara Swisher and Lauren Goode interview Rick Osterloh, SVP of Google Hardware. A few points stand out for me:

1) Mr. Osterloh claims he was actually hired by Google to run the Motorola unit (post acquisition), but Mr. Osterloh’s LinkedIn public profile page says he ran the Android division of Motorola Mobility back in 2007. Is Mr. Osterloh not completely pleased with Motorola’s performance?
2) When asked whether the Google Assistant feature of Google Home products is leveraging the same, familiar, web Google search service, he added “yes, but we’ve tweaked it a bit”. But he did not offer any clear assurances this leveraging is not the case.
3) Ms. Swisher started the interview by noting Google’s new call “we do hardware better than anybody else”. Unfortunately neither Ms. Swisher, nor Ms. Goode pick up on this statement during the interview. Obviously this statement voices the core of “competition to be the best”. Investors bullish on Alphabet should think about whether a strategy built around this “king of the unprofitable hill” of duplicating features, trashing prices, is a smart one promising more profitability, or not.
4) When asked about what, if any, impact concerns about consumer privacy had on the design of the Google Home product, Mr. Osterloh merely answers “if you don’t use the attention phrase, we don’t listen in”. Once again, neither Ms. Swisher, nor Ms. Goode probed any deeper on this point.
5) When asked what the key differentiator is, from his point of view, between Google’s hardware, and “everybody else”, he replied “our AI. Which doesn’t answer your question (chuckles)”.
6) When asked what drove the HTC acquisition, he answers “we hired 2K new engineers”. Once again, investors bullish on Alphabet may want to ask just why the 2K + engineers acquired from Motorola Mobility didn’t cut it, but the 2K engineers from HTC will cut it. Analysts should also take a look at the expense of moving all these people in and out of employment status at Google impacts on the bottom line.
7) Mr. Osterloh pointed to the camera features of the new Pixel phones as an example of big improvements in their hardware devices. (In a recent review of Apple’s new iPhone 8 Plus, we heard very much the same story – “the camera is terrific, 4K video, etc”) Neither Ms. Swisher, nor Ms. Goode probed further on Mr. Osterloh’s comments on this point. Too bad. Pixels & iPhones are smartphones — not cameras with phones included as accessories. Or are they? Anyone interested in what “innovation” means, should take a look at how leading manufacturers of smartphones are producing their latest models. In our opinion, “innovation” has been long gone from any of these devices. Contact us to learn more.
8) Mr. Osterloh disclosed Google Assistant is using the same prescriptive, rote, learning method as other “personal assistants” (Cortana, Siri, Alexa, etc). The lexicon is simply massively larger (he mentioned 100 million possible query strings). So the “intelligence” still isn’t their in any of these devices to “naturally” answer posed questions.

The differences I’ve noted between Microsoft’s Cortana, and Google’s competitive Google Now and OK Google, which I cited in the prior two posts to this blog and are important for me, are emblematic of my need for a Personal Assistant (PA) application to seamlessly interact with like applications on any mobile computing device I own. I imagine I’m not alone in this. So how do Windows Phone 8.1 and Android 4.1 KitKat compare on this point?

When I ask Cortana directions, the PA passes the request over to Bing Here maps. Once the handoff is complete, any voice interaction appears to be with the Bing Here app, and not with Cortana. In contrast, when I set Google Now and “OK Google” on the same task, the voice interaction is strictly with “OK Google”, which appears to manage the Google Map application for me.

This distinction is potentially a big deal if either PA is limited as to just what can be indexed when it comes to compiling a set of content for search. Let’s include Microsoft’s Delve Office 365 application into the discussion. I have added Delve to the Office 365 E3 plan I maintain for my business. But when I use Delve I don’t get much of anything at all. Why? I am a consultant and the only user on the Office 365 subscription I maintain for my business. As well, I am not making much use of One Drive for Business, but I am making a lot of use of the rest of SharePoint Online for an Enterprise Document Management (EDM) application.

Nevertheless, when I call up the Delve application, I am served with the following message: “Give Delve more to work with[:] Store and share your documents where Delve can get to them, such as in OneDrive for Business, and Delve will automatically bring you the most relevant content.” But why can’t Delve work with the content in the Document libraries I’ve set up in Office 365, or with the voluminous amount of email messaging I have available across my email accounts (I have more than 5 active email accounts)?

Unfortunately I haven’t an answer to share with readers on this question. But it may be helpful to consider why, and how product marketing at Microsoft opted to proceed careful with regards to just what information Delve would be permitted to parse, index, and then to serve up in response to queries. Unfortunately (or fortunately, depending on which side of the Privacy debate a reader happens to choose) I suspect privacy concerns have limited how this potentially very helpful application can do.

Bottom line: I find Google Now, “OK Google” approach to a PA to be more useful right now. I’m genuinely excited about what a “manager of managers” kind of PA can do to help my personal daily productivity. Perhaps readers will share this enthusiasm.

Getting driving directions is likely to be a very common need for mobile computing. I used Cortana and OK Google to put together driving directions with very different results. I picked a location forty miles from my home and simply asked each personal assistant to provide me with driving directions.

The response I received from Cortana was less than satisfactory for two reasons: 1) Cortana cut me off in mid query on two of my three attempts. Pauses appeared to be interpreted, incorrectly, as end-of-voice-query field delimiters. So the audible responses I received on both of these unsatisfactory results were wrong. The response to my third attempt to present the destination was even worse. Instead of receiving an audible reply, I was presented with a results page from Bing with a list of results, all of which were relevant to the location I was after, but, if I had been driving, would have been entirely useless. 2) When Cortana correctly understood my question, the app started the “Bing Here” mapping application, with its own voice response component. This is not necessarily a problem, but for the otherwise computer limited user (my wife is a good example of this type of person), the kind of seamlessly integrated response I received from “OK Google” to the same query would have been preferred.

It’s worth adding a bit to the above critique. There are likely to be a good set of voice commands sure to prompt Cortana to reply with an audible answer. I was not able to find them. When I attempted to start my direction query with “Navigate to” as per a command I found on the list at Cortana Commands List – Microsoft Voice Commands – Video, the reply I received was erroneous “navigate to 57th Street in Manhattan, between 6th and 7th Avenues” was intrepreted as “navigate 257th St. between sixth and 7th ave in Manhattan”. The results were served as a list of links, and, once again, Cortana wasn’t helping.

In contrast, “OK Google” correctly fielded a request phrased as “get directions to West 57th Street, Manhattan, NY” and replied, correctly, with an audible answer. What’s more, “OK Google” “spoke for” the Google Maps app in precisely the kind of seamless handshake needed for computer challenged users, as I mentioned above. As I will explore in the next post to this blog, the question of how best to serve up a seamless response to this type of query, and what a successful effort has to say about the usefulness of search across the set of apps someone happens be be using, is, in my opinion a big one.

Bottom line: I was better able to find a list of useful voice commands to produce the kind of audible reply I required for “OK Google” than was the case for Cortana. One would hope Microsoft will move to correct this issue and close the gap, at least as regards the list of commands one needs to use to elicit a desired audible response from Cortana.

After a wait of seven months (five beyond an original expectation), I finally received an update to Windows Phone 8.1 for my Lumia 925 (T-Mobile is the cellular carrier) during the first week of November, 2014. Cortana, Microsoft’s “personal assistant” was included, despite rumors I had heard to the contrary from some contacts located internationally.

Around the same time of this update to my primary smartphone, I received an invitation from Google to take a look at their “inbox” email product. In order to participate, I needed to first add the “inbox” app to a mobile phone. So I decided to add a smartphone running Android O/S to my set of computing devices. I found an offer from T-Mobile for LG’s D-415 “Optimus L90”, running Android 4.1 KitKat. I could buy the mobile phone, outright, for $79.99 (included a $20 trade-in for an Apple iPhone 4S). I purchased the phone and, therefore, will comment here on some impressions on Google Now aka “OK Google”, as well.

Before jumping into my initial thoughts on both of these personal assistant apps, I would like to point readers back to the last post to this blog, Any meaningful feature gap between high end and low end smartphones has been obliterated. I based my positions, expressed in the post, on my initial opinion about the LG D-415. Bottom line: I think this phone represents an enormous bargain compared to smartphones at the high end. I’ve been using it for about two weeks to track a daily walk (complete with mapping via GPS) and can’t complain at all about its performance. When the purchase price is considered, along with the 27 months of $22.00 per month I will, altogether, end up paying T-Mobile for my Lumia 925, I can’t overstate the value of the LG smartphone.

Cortana

I was disappointed by my first few days using Cortana. Our family includes a member with a pronounced European accent. When she attempted to use Cortana, the results were far off. Cortana did not understand the questions asked and, worse, never offered my family member an opportunity to train for voice recognition. In all fairness, I need to note “OK Google” shares this disinterest in training for better voice recognition. Is this oversight the result of no charge for either personal assistant? Perhaps, though readers should understand I have no substantive information to support the notion.

Another annoying feature amounted to an apparently arbitrary process whereby Cortana, the personal assistant, served up responses audibly, or with a page of text results. Perhaps I’m missing something. Microsoft does provide some guidelines about the questions Cortana can, and will answer. But I would recommend they make the limitations on audible response clearer. My attraction (which I can’t help but think most users will share) is for all responses to be made audibly to questions asked.

Finally, Cortana appeared to be stumped by some questions Google Now, aka “OK Google” could answer. I personally was very disappointed at this result. I am a big fan of Microsoft and had high expectations of the “power” of Cortana given all of the content published about how this personal assistant app leverages “Office Graph”, Bing, etc. But, bottom line, I stumped Cortana a few times where, in all fairness, the app should have served up a valid answer.

OK Google

As just mentioned, “OK Google” (is the name “OK Google” or is it “Google Now”? This ambiguous branding should be corrected) adroitly answered questions about an upcoming European election correctly, and, even better, with an audible response. But I do need to note the difficulty I experienced (and continue to experience) simply locating the right app for the “OK Google” feature. In contrast, it’s hard to miss the button for Cortana on Windows Phone 8.1.

In the next post to this blog I’ll make some comments about how each of these personal assistants handled a likely common requirement — getting driving directions.

Consumer markets for smartphones no longer present any gap, whatsoever, between high end and low end entrants as regard high value features. With this gap obliterated, industry players will do well to implement product marketing strategies with a proven effectiveness in pure commodity markets or else risk extinction. This means product marketers should emphasize methods of lowering the cost of manufacture, and secondary markets to prop up revenue expectations while closely scrutinizing new model planning.

Here’s a case in point. We just purchased, outright, an LG Optimus L90 Smartphone from our wireless data provider, T-Mobile. Our total cost to acquire this device amounted to a one-time charge of $99.99. We should also note we maintain 2 Nokia Lumia 925s, which we purchased from T-Mobile at a cost of approximately $600.00, each. We are still paying, monthly, for each of the Lumias and will likely continue to do so for at least another few months.

But with an Android KitKat O/S, and a very extensive set of app options, we can’t find anything we’ve given away by opting to purchase the LG-D415 instead of a new Lumia, or even an iPhone 6. Sure the Lumia and the iPhone 6 offer many more powerful features than our LG Optimus L90, but we have no need for them. In this writer’s opinion, when features reach a usefulness plateau as they have in the smartphone market, consumers have zero incentive to migrate up the ladder to more expensive versions of the same commodity.

Leading manufacturers of smartphones are already exhibiting a set of strategic moves befitting general agreement about the nature of the market as, in late 2014, entirely commodity driven. Accordingly, Apple is talking about producing a gold version of its iPhone 6, which is already available for custom monogramming. This move makes sense for a manufacturer with a leading product whose principal attractiveness is its position as a status symbol for a highly concentrated set of consumers habituated on only buying the leading product in the category.

At the low end manufacturers like Samsung are feeling the pain as competitors with a substantially lower cost of manufacturing, for example, Xiaomi, seize market share. For this segment of the market, app stores look to be an oasis in a profit desert. No wonder Microsoft is racing to win a place on the radar of app developers as its best hope to capitalize on the smartphone market.

Look for further consolidation in this market as manufacturers either drop out, or consumer rivals.

White’s quote speaks to the current controversy about these new smart phones, and points to what he refers to as an “insatiable appetite” for these devices on the part of Chinese consumers. No product has ever, or, in this writer’s opinion, will ever stimulate insatiable consumer appetite. Anyone with a keen interest in the fortunes of these newest smart phones from Apple should maintain a skeptical stance about the usefulness of any comments like White’s.

If readers are skeptical about the veracity of our take on White’s comment, we simply point to the fate of Apple’s stock in market activity on Thursday, September 25, 2014. The stock dropped over 3% precisely around the set of concerns White calls “irrational”. If these concerns are, in fact, “irrational”, then why the deep dive on Apple’s stock price?

In this writer’s opinion, consumer concerns about these new smart phones are not irrational. As we have published earlier in this blog, and some other people (who we consider to be astute) have also written, the price of these devices will fall out of the range of the “average” smart phone consumer by a substantial amount. So, with the very high end of the consumer market not only targeted for these products, but, even more, already rapidly consuming them, the market reaction is entirely understandable.

Folks shopping at Burberry’s expect perfection. Sure they are willing to pay for it, but, in return, they are the most demanding of consumers. So market dissatisfaction with Apple’s mistakes and, perhaps, PERCEIVED trickery (why would an affluent consumer throw away a perfectly functional iPhone, albeit a previous model, for a slick new entry, which, nevertheless is “bendable”), should be entirely acceptable.

Further, an analyst who looks at market reaction and attempts to DENY its legitimacy is an analyst whose words will likely receive a lot of careful scrutiny.

On Friday, September 19, 2014, Curt Prins (a mobile strategist) posted his thoughts, which were distributed by LinkedIn, on the comparative impact of the launch of the Android One, in India to Apple’s recent, highly publicized debut of the iPhone 6. Prins titled his post Apple just lost the global smartphone war to Google. This writer has written several posts to this blog to voice similar opinions about whether or not all of the media accolades about Apple’s new smart phones really amounts to much, at all. My concern is whether or not Apple will be able to maintain its enormous market capitalization just on the appetite of consumers at the very high end of the market, or not.

But Prins is to be commended for supporting his contention with metrics. I didn’t take the time to put together supporting data for my position, choosing, rather, to articulate it based on my gut instinct about markets and where all the frivolity surrounding the September 9, launch of the new iPhones might be headed.

A quick look at the Android One home page exposes some additional information worth noting: Samsung is noticeably absent from the set of OEMs committed to manufacturing the devices. The same set does include several businesses located in India, including Karbonn, and LavaOne to name just two.

The features of the device can be reviewed on the Android One web page. The quad core processor, all day battery life, and dual SIMs are more typical of smart phones targeted to the high end of the market than the low end. So the $105.00 price Prins claims for the Android One represents a significant move, on the part of Google and its Android OEMs, to lower the cost of entry for emerging markets (with India being the first) to the world of mobile online computing. Further, the actual consumer costs Prins presents, in contrast, for the iPhone 6, etc., lend accuracy to my own comments, earlier this week, on the actual street price for the iPhone 6, “after the emperor has shed his clothes (meaning the carrier subsidies applied to create an artificial consumer price of $199.00)”. Is yet another Apple smart phone, unlocked, worth $649.00? After the rush of the last two weeks, I don’t think so.

The Android One is also some bad news for Microsoft’s efforts to introduce low cost smart phones to the same markets. Ditto for Blackberry. But the real story, likely in the making, is precisely the change in leadership for the smart phone industry Prins alludes to in his post.

Apple’s September 9, 2014 new products debut has magnetized an almost entirely positive set of market comments. But can such a set of editorial content actually work against Apple? The lopsided set of positive, almost glowing market commentary about the iPhone 6, 6S, iWatch, and iPay reaches a pinnacle, of sorts, in a piece written by Tiernan Ray, which was published by Barrons on September 16, 2014. The title of this article is Apple: Don’t Listen to the Doomsayers. Even Ray’s decision to include a contrarian opinion expressed by Doug Kass of Seabreeze Partners in his bucket of “doomsayers”, in this writer’s opinion, exemplifies the excessive weight of positive opinion about these new products, and what they promise to bring to Apple.

So, to answer the question posed in the title of this post, we certainly hold the opinion an almost unanimously positive market reception for a set of comparatively very expensive products like these from Apple, can be dangerous to the financial health of the ISV producing them. It is simply not tenable, in this writer’s opinion, to assume Apple will be able to pay for the very high market capitalization it presently enjoys by continuing to focus on the top of the consumer market for these devices. Regardless of whether the cost of purchasing an iPhone 6S is subsidized by a carrier here in the US, or a consumer ends up paying outright to purchase one, a $199.00 street price is not reflective of the TRUE cost of acquiring the product.

The US market is trained to react positively to offers fueled with artificially low prices. Not so the rest of the world, and, especially not so in emerging markets. These other locales and communities of consumers are not likely to line up to buy either of these smart phones anytime soon. These products will only be available, at launch, in a basket of countries, and, in this writer’s opinion, for good reason. Average global consumers simply cannot afford these devices.

What is even more troubling about the editorial euphoria bubbling up around these devices and the debut, as a marketing communications piece in its own right, is the complacency expressed by what is referred to as the “mainstream media”, here in the U.S. on the question of whether average consumers here in the US will have the fortitude to make rational decisions about whether or not it makes sense to purchase one of the products.

One popular publication ran a headline something like this: “Like it or not, Wearables are Here to Stay”. Have we really reached the age of “solution without a problem” on steroids? This writer does not think so. If consumers do not need wearable tech, then they won’t buy devices in the category. Certainly, different consumer segments exhibit different needs, but all this talk will have to evolve into buying action before we can really be convinced a shift in consumer sentiment has occurred.

Bottom line: the old adage “too much of a good thing” speaks the truth. It will be interesting to gauge results a quarter or two down the road.

Readers unable to read the entire article are encouraged to watch the 3 minute video embedded in the article. Why the writer would choose Time Square as a fair location to collect a sample of public opinion as to the popularity of Windows Phone (or the lack of it) eludes this writer. But, to give Stern the benefit of the doubt, perhaps someone in Microsoft’s PR team has identified mass market smart phone consumers as the target market for the Windows Phone 8.1 O/S.

If this is the case (and one must ask, with so many of these “reviews” producing nothing more positive than “it’s a great phone, but no one will buy it”, over and over again) then someone at Microsoft should take corrective action to ensure PR communicates the right message to the media.

In this writer’s opinion, the target market for a comparatively expensive smart phone like the HTC One, with the Windows 8.1 O/S, is enterprise business users (inclusive of the “fringe” created by the consumerization of IT and the BYOD structures enterprise businesses have constructed to support it). After all, what’s a tourist in Times Square going to do with Office? Office 365? Enterprise Search (for which Cortana will play a big role)? Yammer?

One can argue these consumers will be attracted to the camera on the phone, but the camera is not one of the “mission critical” features of this smart phone. The Apps we just mentioned, and to name but one more, Remote Desktop Connection, make up the solution for the burning need this target market has for the Windows Phone. In this writer’s opinion, making the rounds of mass media every time a new feature is added to the Windows Phone O/S, or even to inform them about the debut of the Surface Pro 3, only serves to render Microsoft’s products something less than what they ought to be.

Samsung’s earnings guidance for the second quarter, 2014 generally disappointed analysts and stimulated some broad downward revisions in likely global market consumption of high end smart phones and tablets. Some of the downward direction indicated by Samsung’s guidance was also attributed to stiffer competition for the low end of these markets from Chinese manufacturers.

Regardless of how one reacts to this guidance announcement, it should be clear global market appetite for smart phones, and, perhaps, tablets, has been generally satisfied. In the opinion of this writer, the slowdown can be attributed to feature exhaustion for the current form factor and chip sets. Consumers have bought up what they need. When hardware OEMs and their ISV partners finally come to market with solutions for the remaining areas of burning need — richer voice feature sets enabling more utility for mobile consumers, and true integration within mobile transportation beyond a peripheral to be plugged in, to name but two of these — then high velocity sales can be assumed to occur.

But for now these features are not available. Apple looks poised to perform the best in these kind of conditions. iOS devices sit at the very top of the smart phone heap. As many analysts have written, despite a much smaller market share than the combined reach of Google’s Android partners, including Samsung, Apple just makes much more money in the market and enjoys much higher margins than its competitors.

Two recent hires: Angela Ahrendts (late of Burberrys) to head the Apple Store operation, and Patrick Pruniaux (formerly the Vice President of sales at Tag Heuer) provide solid support for the notion Cupertino plans on protecting its position as the name brand at the very top of the smart phone market.

Once a commodity technology market plateaus, in this writer’s opinion, brand recognition, price, and reputation all trump technical features for the top cut of consumers. Apple does not look to be giving back any territory in this arena anytime soon.

On the other hand, Microsoft has demonstrated some of the voice features likely to stir up consumer demand (“Cortana”). But the expected release of Windows Phone 8.1 has gotten off track, so consumers have yet to experience, first hand, the improvements Cortana appears capable of delivering. In the meantime, other analysts claim Windows Phone is losing market share globally. As to the Surface Pro 3, this device is positioned as a better solution for the laptop market, rather than a tablet killer.